Look beyond the numbers

Published: Thursday, November 5, 2009 at 4:30 a.m.

Last Modified: Wednesday, November 4, 2009 at 4:51 p.m.

To The Editor: It seems that the AP story on insurance company profits has a gaping hole in it. Allow me to quote from the story: "(Maryland Rep. Chris) Van Hollen is right that premiums have more than doubled in a decade, according to a Kaiser Family Foundation study that found a 131 percent increase. But were the Bush years the golden ones for health insurers? Not judging by profit margins, profit growth or return to shareholders. The industry's overall profits grew only 8.8 percent from 2003 to 2008, and its margins year to year, from 2005 forward never cracked 8 percent".

So if profits increased only by around eight percent but premiums jumped by 131 percent, what caused the increase in premiums? The story ignores that question.

So what accounts for the 131 percent jump? Could it be because insurance companies, like baseball, are exempt from anti-trust laws, and can increase premiums as they please? And is the money from the steeply increased premiums used for such "business" expenses as exorbitant salaries of insurance execs? Perks like private jets? Retreats in Las Vegas? Brass and granite edifices to house company headquarters? Fielding scores of lobbyists in Washington and state capitals around the country?

<p>To The Editor: It seems that the AP story on insurance company profits has a gaping hole in it. Allow me to quote from the story: "(Maryland Rep. Chris) Van Hollen is right that premiums have more than doubled in a decade, according to a Kaiser Family Foundation study that found a 131 percent increase. But were the Bush years the golden ones for health insurers? Not judging by profit margins, profit growth or return to shareholders. The industry's overall profits grew only 8.8 percent from 2003 to 2008, and its margins year to year, from 2005 forward never cracked 8 percent".</p><p>So if profits increased only by around eight percent but premiums jumped by 131 percent, what caused the increase in premiums? The story ignores that question.</p><p>So what accounts for the 131 percent jump? Could it be because insurance companies, like baseball, are exempt from anti-trust laws, and can increase premiums as they please? And is the money from the steeply increased premiums used for such "business" expenses as exorbitant salaries of insurance execs? Perks like private jets? Retreats in Las Vegas? Brass and granite edifices to house company headquarters? Fielding scores of lobbyists in Washington and state capitals around the country?</p><p>J. Arthur Heise</p><p>Hendersonville</p>